SCHROEDER BUSINESS DEVELOPMENT REVOLVING LOAN FUND

SCHROEDER TOWNSHIP   PO Box 60, SCHROEDER, MN. 55613

To: Schroeder Businesses

Subject: Schroeder Business Development Revolving Loan Fund

The Township has a loan fund (formerly Storefront Loan Program) available to new or existing businesses in Schroeder Township. Now equipment and infrastructure are eligible. Each approved loan will be at 3% for the length of the loan. The terms of any loan shall not exceed the following and are to be paid on a monthly basis:

  1. A loan between $1,000 and $5,000 will be a for 3 year term.
  2. A loan between $5,001 and $10,000 will be a for 4 year term.
  3. A loan between $10,001 and $15,000 will be for a 7 year term.
  4. A loan over $15,000 will be a for 10 year term.

Application forms: (click here for printable copy)

A.  Upon completion of the application (NOT the final page), please notify Town Clerk or a Town Board member of the amount requested and project specifics.

B.  Depending on the current balance in the loan fund, the Board can make a tentative approval of your request.

C.  Take the application to a bank loan officer for approval of your loan. (the Board has signed agreements with: Grand Marais State Bank, Lake Bank, North Shore Federal Credit Union, and Wells Fargo Bank)

D.  The loan officer then sends the loan application to Town.

E.  The Town Board acts on your approved request with a formal Motion.

F.  The money will then be set up in a separate account and issued upon receipt of invoices, for direct payment or reimbursement, by the participating bank.

If you have any questions, please contact the Town Clerk. These application forms should provide you with a good working base for your loan request. We look forward to working with you.

GUIDELINES FOR THE

SCHROEDER BUSINESS DEVELOPMENT REVOLVING LOAN FUND

PURPOSE

The Schroeder Town Board in cooperation with the Iron Range Resources and Rehabilitation Board (IRRRB), Wells Fargo Bank, Lake Bank, Grand Marais State Bank, and North Shore Federal Credit Union have developed a Revolving Loan Fund for the purpose of providing financing for eligible businesses in Schroeder Township. Capitalization of this program came from 3:1 match basis, whereas IRRRB provided $3 to every $1 of local match.

The principal objective of the program was to offer the business an incentive to improve the appearance of their storefronts. The objective has now been changed to include financing for equipment and infrastructure to help new businesses get started and expand existing businesses. Home based businesses would now qualify. Secondary objectives are to stimulate private investment, expand the tax base and provide new job opportunities through the establishment of new businesses or the expansion of existing businesses.

LOAN AMOUNTS

The minimum loan amount is $1000 and the maximum loan exposure from this loan fund shall be up to $30,000 and matching the amount from a participating lending institution.

ELIGIBLE BUSINESSES

The Schroeder Business Development Loan Fund exists for new and existing businesses located in Schroeder Township.

FINANCING POLICIES

A.  Allowable Uses of Loans:

  1. Equipment
  2. Infrastructure
  3. Renovations designed to meet the letter of the law to be in accordance with the Americans with Disabilities Act (A.D.A.). This is a federal regulation which requires most facilities to meet handicapped accessibility standards. The following are eligible uses of the loan funds as described in the law: grading, walks, parking spaces, ramps, and entrances.                                                                                                 B.  Term of Loans

The length of any loan made by the Schroeder Business Development Revolving Loan Fund will be based on the amount of the loan. The term of any loan shall not exceed the following and will be repaid on a monthly basis:

  1. Loans between $1,000 and $5,000 will be a 3 year term.
  2. Loans between $5,001 and $10,000 will be a 4 year term.
  3. Loans between $10,001 and $15,000 will be a 7 year term.
  4. Loans over $15,000 will be a 10 year term.                                                                          C.  Interest Rate

Interest rates will be at 3% as established by the Town Board upon approval of application.

Interest rates shall be fixed throughout the term of the loan

D. Fees and Charges

  1. At the option of the Schroeder Town Board, all or part of legal costs incurred by the Schroeder Business Development Revolving Loan Fund in the closing of the borrower’s particular loan may be passed on to the borrower.
  2. All lending fees shall be paid by applicant.                                                                           E.  Other Financing Policies                                                                                                1.Any loan made by this Board shall be adequately secured to the satisfaction of the Board.                                                                                                                                              2.  Any loan made by this Board shall be personally guaranteed by the principal owners of the borrower to the satisfaction of the Board.                                                      3.  All loans shall be subject to whatever agreements and documents are reasonably necessary to protect the interests of the Township and to insure that the purpose and intent of the program are met.                                                                             4.  No loan or other financial assistance may be made to refinance existing debt or to be used for operating expenses.                                                                                             5.  The recipient of such loan or other financial assistance is creditworthy and has the ability to perform its obligations under any agreements to be entered into with this Board.                                                                                                                                        6.  Benefits will be realized by the citizens of Schroeder Township in the form of increased businesses, jobs, and/or tax base.